Impact of Executive Remuneration and Firm Leverage on Firm Stability: Lessons from European Firms

The aim of this study is to examine the impact executive remuneration and firms’ leverage on stability as measured by winsorized Zscore (wZscore). wZscore measure corresponds Altman Zscore, which increases default risk decreases. To test study’s hypotheses, a linear regression model applied 6-year panel dataset 180 listed firms categorized in 10 economic sectors operating 22 countries from years 2013 2018. results show that has significant negative firm wZscore. Additionally, positive stability. Beyond theoretical implications, findings have some practical implications are particularly relevant boards directors, shareholders, managers, policymakers. suggest executives should be offered proper package maintain their along with capacity equity assets cope up unprecedented circumstances long-term debts. Finally, offers specific recommendations for how can balance pay performance terms ensure better optimize own society's sustainable development.